Thursday, June 27, 2019

The efficiency of public services

I've become more acquainted with the workings of state agencies over the past few years, and consequently have become more interested in some of the theories about the efficiency with which the government delivers public services.

When looking at the inefficiencies of government services, I've previously focused on the big picture issues:
  1. The agency problem: The government is not necessarily attempting to achieve what the people (or a person) wants -- it has its own agenda.
  2. The information problem: Even if the government were fully committed to serving the needs of the people, it would not know how to serve those needs as well as the people themselves do. 
Along these lines, you could also define "the control problem", by which I mean that the state is a massive, complicated institution, making it very hard for the elected officials to actually assure that federal employees are doing what the elected officials think they should be doing. This issue exists in any institution,  but it creates some special problems for democratic states, which will be the focus of this post.

What I've seen in government agencies is that the employees are extremely constrained, to the point that it is difficult for them to do their jobs. There are tons of bureaucratic hoops. Some of these are the natural result of working for a big institution and trying to coordinate large numbers of people (which includes the public, and not just the employees). But I believe many of them are consequences of the need to maintain "the public trust". This is especially complicated because government employees are working with tax dollars -- forcibly confiscated wealth. If a government employee overcharges (or does not fulfill their commitments), it's a scandal. In contrast, if a private company does the same, its just a bad business decision. Throughout the institution, people are more forgiving of corruption in private institutions -- both because the costs are often limited to people who are inside the institution, and because others (e.g. customers) are free to walk away. As a result, government employees are wrapped in red-tape to avoid corruption -- every decision goes through several layers of approval to make sure that nobody is abusing their position. Of course, it can only stop a fraction of the corruption out there, and it probably costs more money than it saves. But the point that elected officials can claim they are doing everything in their power to stop corruption, and everything revolves around CYA rather than GID.

Another problem with government agencies is that everything is ultimately a performance -- the ultimate justification for government activities is that they get supportive officials re-elected.

While I'm on this topic, the conventional Republican complaints hold no water.
  1. Workers need to fear losing their jobs. Complacency is rarely a problem among career civil servants, that I've seen. I think Republicans just want to maintain a general culture of financial insecurity, so that they can better push around workers.
  2. Agencies need more efficient management (hence, the hiring freeze). Again, the Republicans talk a big game, but have no idea how to improve management. If management seems bloated, it is a consequence of the control problem described above. It is exacerbated by the Republican drive to hold worker's feet to the fire. Policies like the hiring freeze don't magically make agencies do more with  less -- in fact, it just makes the operation of the agencies more complicated (more layers of approval to make a hire), and increases the administrative burden. Ultimately, all of this stuff ends up being just another form of political performance -- one more thing to distract employees from the jobs they are supposedly hired to perform.
If the elected officials want to make government agencies efficient, they need to start by looking at their own behavior. Start by setting clear strategic plans (wouldn't NASA love that), and then allocating the money needed to implement those plans. Let the agencies know how much they have to spend and what they are expected to accomplish. And stop denigrating the employees.

p.s. Maybe "control" is the problem. Maybe the solution is to trust the employees. Or shrink the state to the point that it can be efficiently managed.

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